The investment by Altria -- maker of top cigarette brands including Marlboro -- gives it exposure to a global market that could be worth $200 billion in 15 years.
At a price of $16.25 Canadian per share ($12.12), Altria's $1.8 billion investment nets it a 45% equity stake in Cronos.
Marijuana stocks, including Cronos, rallied sharply higher ahead of the opening of Canada's recreational marijuana market in October , but they've been declining ever since on reports of supply shortages; uncertainty over when Health Canada will expand the products allowed in its recreational market to include high-margin vapes, edibles, and beverages, and concern over valuations.
Washington could still crack down on marijuana companies operating in states where it's legal, but evidence suggests the likelihood of that is declining.
For example, Congress recently included laws in its latest farm bill allowing farmers more freedom to grow hemp, a low-THC variation of cannabis sativa, and the Food and Drug Administration granted approval over the summer to an epilepsy medicine derived from marijuana.
For instance, Constellation Brands estimates legal marijuana sales worldwide could exceed $200 billion in 15 years .
- Marlboro Maker Places $2.4 Billion Bet on MarijuanaU.S. News & World Report
- Cannabis Allure Proves Irresistible for Tobacco Company AltriaBloomberg
- Altria Buys 45% of Cronos Group for C$2.4 billion with Option to Take ...New Cannabis Ventures
- Cronos Confirms $1.8 Billion Investment From Marlboro Maker AltriaTheStreet.com
- Altria bets big on cannabis with $1.8 billion investment in Canada's CronosYahoo News
- Owner of Marlboro cigarettes invests $3.8BILLION in a Canadian marijuana ...Daily Mail
- Pot Stocks Move Higher Following Altria's Buy of Large Cronos StakeTheStreet.com
- Cannabis stock Cronos soars 24% as Altria takes major stakeMarketWatch
- Altria Makes Its Marijuana MoveMotley Fool
